The South Korean authorities would plan to block the crypto exchange platforms which may have worked without adhering to the requirements set by the country’s financial regulator.
On March 21, local Hankyung media indicated that the Financial Intelligence Unit (FIU) of the Financial Services Commission envisaged sanctions against crypto exchanges for having allegedly operated in the country without reporting as an operator to appropriate regulators.
The South Korean financial authorities require that crypto exchanges realize regulators as virtual asset service providers (VASP) under the country’s specified financial information law.
The CRF survey a list of exchanges and leads consultations with related agencies. The regulator also considers sanctions, such as blocking access to exchanges, as they begin to prepare countermeasures.
Exchanges operated without Vasp reports
The list of exchanges that would have provided South Korean services without the appropriate Vasp reports includes Bitmex, Kucoin, Coinw, Bitunix and Kcex. The exchanges would have provided marketing and customer support to Korean investors without going through the country’s compliance process.
Under the laws of the country, sales, storage, brokerage and cryptocurrency management operators are required to present themselves to the CRF. If the exchanges do not comply, their business will be considered illegal and subject to criminal sanctions and administrative sanctions.
A CRF official declared in the report that measures to block access to exchanges included in the list are being examined. The official said that the financial regulator currently consults Korea of communication standards, the regulator in charge of the Internet, on how they can block access to exchanges.
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South Korean exchanges face a meticulous examination
In addition to foreign exchanges, the exchanges of South Korean crypto are also faced with a meticulous examination on suspicions and rumors of financial misconduct.
On March 20, the prosecutors made a descent into Bithumb following suspicions that his former CEO, Kim Dae-Sik, diverted the company’s funds to buy an apartment. The authorities suspect that the exchange and its executive may have violated certain financial laws when buying an apartment. However, Bithumb replied that Kim had already taken out a loan to reimburse the funds.
In addition, rumors on intermediaries are paid to list projects on Bithumb and Upbit have surfaced. Citing anonymous sources, Wu Blockchain said that projects said they had paid millions of intermediaries to be entered on trade.
Upbit replied, demanding that the media discloses the list of digital asset projects that have paid brokerage fees.
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